if AIA is going to be around for another 2 years is there an

by tan gui an » Thu Oct 30, 2008 07:19 pm

if AIA is going to be around for another 2 years, is there any other company taking over?

(I am adding your other post below, to this one, and deleted your third one---lori)

if AIA is going to be another 2 years will there be another company taking over? What happens to the policyholders policies? Are the policies still carry on? I am an AIA agent, am I right still bring in business to the company?

Total Comments: 4

Posted: Thu Oct 30, 2008 07:25 pm Post Subject:

From the Bangkok Post - Sept 22, 2008

AIA calm amid global storm

Thomas White was greatly relieved when the US Federal Reserve announced last Tuesday that the Federal Reserve would provide US$85-billion in secured revolving credit to ensure that AIG met its liquidity needs.

The executive vice-president and general manager of AIA Thailand had been hounded by local media after American International Group, the local insurer's parent firm, was reported to be in crisis.

AIG was in dire need of funds to cover potential losses from derivatives and other securities hit by the global credit crunch.

AIA Thailand had been conspicuous by its silence for two days before Mr White - flanked by senior vice-president and deputy general manager Anucha Laokwansatit and senior vice-president Sutti Rajitrangson - met reporters on Wednesday.

AIA Thailand, founded in 1938, is by far the country's largest life insurer, with a market share more than 50% and 4.8 million policies in force.

``We wanted the government to first tell the truth about what's happening ... instead of having the company have to defend itself, says Mr White.

"I don't communicate to you [the media], unless I know the truth [from New York]," said Mr White at the press conference.

"We wanted the government to first tell the truth about what's happening and who AIA is, instead of having the company have to defend itself."

Chantra Purnariksha, secretary-general of the Office of the Insurance Commission (OIC), emerged first to call on AIA policyholders to remain calm amid the turmoil in global financial markets.

She also confirmed AIA's financial strength, its massive assets of 383.06 billion baht and its retained earnings of more than 70 billion.

The Thai Life Assurance Association (TLA) also reaffirmed on Friday that the local industry remained fully intact and had not been affected by the US financial crisis.

Apirak Thaipatanagul, a TLA director, said stringent regulation and market growth averaging 10% over recent years meant there was a slim chance of Thai life insurers collapsing like general insurers in the past.

"Policyholders of every firm can rest assured that their long-term savings with life insurance companies are safe," said Mr Apirak, also the CEO of Thai Life Insurance, the country's second largest life insurer.

"Despite the lack of a mechanism through the government's savings guarantee, the industry provides a safety net through multiple layers - the policy reserves for every policy written, the capital fund requirement of at least 2% of reserves, a stringent approval requirement for risky transactions by insurers and even dividend remittance to foreign shareholders."

More importantly, he said, the OIC had initiated an early intervention scheme to take care of any firms whose capital funds fail to meet legal requirements.

Through the programme, the OIC can order troubled firms to beef up their capital base, suspend new policy underwriting or even find new strategic partners to inject fresh capital.

"Given Thailand's low life-insurance penetration, continuous market growth and limited licences, our life insurance business remains attractive," said Mr Apirak. "Thus, we've never felt that the industry could see any firms become financially troubled as feared."

Ms Chantra said regulators planned even "tighter" supervisory measures to ensure greater financial stability in insurers.

For instance, insurers will be required to report their operating performance and financial status to the OIC every 30 days.

Kanjana Samekhao, the OIC's director of insurance product supervision, said a new policyholder protection fund would provide additional peace of mind to consumers in case a life insurer encounters financial trouble.

"The problems of insurance firms are mostly about premiums due but uncollected," she said.

"But such problems are not found on the life side, as contracts are naturally for long terms."


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Looks like you might be ok. Two years from now? Who knows. I'd probably keep my networking intact, you know..just in case.

Posted: Thu Oct 30, 2008 09:55 pm Post Subject:

I don't think any of us really know what to expect two years from now. Its all pretty much up in the air but at least you are safe for now.

Posted: Fri Oct 31, 2008 10:16 am Post Subject:

I'm afraid that I dunno much about the financial situation of Thailand but in USA when an insurance company faces financial crunches another insurance company comes forward to its rescue. This act ensures protection continuation to the customers who have policies with the company. However, depending upon the strategies of the take over company the employees of the diluted company may face may experience retrenchment or reduction in the size of work force.

~Jeremy

Posted: Fri Oct 31, 2008 05:38 pm Post Subject:

From my understanding, the parent company is in trouble, Not the Insurance Co. subsidaries. In the USA, American General is a profitable company. It might be a hard sell for Insurnace agents here but the company is quite stable. AIG might sell the Ins. co. to make some money off of it.

Scott

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